Last month we drew attention to MSAs where home owner vacancy rates are rising rapidly, but that article only painted a picture of vacant home units for sale in the current home market. This month, we’d like to spotlight where home-ownership rates are dropping most--an equally alarming and informative portrait of the current state of housing. According to a second-quarter report released by the U.S. Census Bureau, the U.S. home-ownership rate is down to 62.9%--the lowest rate seen in the more than 50 years since 1965.
Declining home-ownership rates, on one hand, reflect the affordability dilemma facing the home-building industry and prospective buyers. As BUILDER’s John McManus posted recently, elevated prices and inadequate inventory has priced many buyers out of the market, and forced them to into the rental market, largely weighing the rates down. But on the other hand, the number could go down when more millennials move out of their parents homes and start renting on their own (which is actually a good sign of recovering economy), creating more households and therefore diluting the home ownership rate, as former Trulia vice president Jed Kolko explained in this article for the New York Times. Ben Sage, regional director of our own Metrostudy's mid-Atlantic region, also weighed in on how different age groups are shaping the landscape of home-ownership rates.
We've scraped latest metropolitan-area data available from the Census Bureau to pinpoint 15 markets that have experienced the largest drop in home ownership between 2Q2006 and 2Q2016. The first 10 markets are visualized in the area-spline chart below.
In the chart we see some of the most depressed markets, like Buffalo, N.Y., and Cleveland, Ohio, that were once prosperous, but were hit severely by the financial crisis and advancement in technology; we also have places reaping benefits from tech industry’s unrivaled expansion, most famously, San Jose, Calif.
Scroll down to see the full table of the 15 MSAs where home-ownership rates have dropped most: